South Korea has formally appointed a new chief of North Korea policy, despite a controversy among lawmakers over his credentials. He assumes the post amid a stalemate in talks aimed at ending Pyongyang's nuclear weapons capabilities.

South Korea's new chief of North Korea policy says economic cooperation is the key to getting the North and South to trust each other, and he does not rule out an eventual visit to the South by North Korean leader Kim Jong Il.

Lee Jong-seok formally became South Korea's new Unification Minister Friday at a ceremony in Seoul's presidential Blue House.

The appointment follows two days of intense questioning by lawmakers this week, during which Lee brushed aside opposition accusations that he was too pro-Pyongyang.

Lee told lawmakers he has never praised Pyongyang's socialist system, and denied that his previous academic writings on North Korea provide any basis for such an accusation.

Lee previously served as the deputy chief of President Roh Moo-hyun's National Security Council. In that post, he helped shape Mr. Roh's policy of reconciliation with Pyongyang, which emphasizes economic cooperation to encourage gradual change in the North.

North-South economic contacts have grown significantly during this administration, but critics say Mr. Roh and his appointees have been too uncritical on such issues as human rights.

One of Lee's first tasks in office is likely to be evaluating North Korea's recent request for a grant of 450,000 tons of fertilizer. His broader mandate will include helping seek a negotiated end to the North's nuclear weapons capabilities.

The United States, China, Russia, Japan and South Korea have tried for three years to persuade Pyongyang to abandon its nuclear weapons programs.

North Korea is refusing to schedule a new round of multinational talks on the issue until Washington drops financial sanctions against a number of North Korean companies. U.S. officials say the sanctions are a law enforcement matter dealing with alleged North Korean counterfeiting and money-laundering, and are not connected to the nuclear talks.

Indonesian diplomat Nana Sutresna, who visited Pyongyang this week, told reporters in Seoul Friday that North Korean officials were adamant that the U.S. allegations are false. "In terms of denying the allegations - they used the words 'strongly deny' - they feel that this kind of measures has no foundation," said the diplomat.

Kim Jong Il and Indonesian President Susilo Bambang Yudhoyono are reported by their spokesmen to have accepted invitations for an exchange of visits some time in the near future.